LAS VEGAS >>
Visit Las Vegas in 2015? Count yourself among the more than 42 million people traveling to the casino corridor last year, according to the resort’s biggest travel booster.
It’s a number that breaks 2014’s record visitation of 41.1 million based on estimates from the Las Vegas Convention and Visitors Authority.
How do they know? The public agency’s lead researcher isn’t saying how the widely publicized number is calculated. The method is proprietary and the information competitive, said senior research manager Scott Russell. But he said the 40-year-old formula involves polling most casino-hotels directly and takes into account occupancy levels, travel habits and airline traffic among other indicators. It also tries to subtract out locals from the airline and freeway traffic figures to get a more accurate count of tourists.
“There is some secret sauce in what we do,” Russell said.
The team combs through data, looking for landmarks that might be eclipsed. They realized a couple months ago that the destination would handily overtake last year’s record, “but didn’t want to go out too far on that ledge,” until making the announcement just before the New Year.
But even though more people are visiting Las Vegas than ever, casinos still aren’t making as much money as they did during their pre-recession peak in 2007.
That’s when 39.2 million people visited, with 6.2 million of them attending conventions and 47.7 million people flying in and out of McCarran International Airport. Casinos kept $10.9 billion of what was gambled during the calendar year, the most ever, according to convention and visitors authority statistics stretching back to 1970.
In 2014, Las Vegas had 5.2 million convention-goers, 42.9 million airline passengers and casinos kept $9.5 billion from gambling.
The difference now, Russell said, is churn. More people are visiting but not staying as long as they might have before, according to the agency’s annual visitor surveys. It’s a trend Russell said started about six years ago.
“More visitors per room, per week, per month, per year,” he said. “It’s like turning tables at a restaurant.”
Plus, there are more hotel rooms, with thousands added when MGM Resorts’ CityCenter project debuted in 2009 meaning more people can fill rooms that didn’t exist before.
As for airline traffic, Russell said the numbers in 2007 included quite a bit of connecting traffic that doesn’t translate into extra tourists. That year there were 3.5 million connecting passengers. In 2014, there were 2.4 million, according to airport statistics.
While gambling revenue is down, Vegas resorts are making more money on hotel stays, restaurants, shows and all the other diversions that don’t involve a spin, shuffle or roll of the dice. Such non-gaming revenue in fiscal year 2014 was nearly $480 million more than it was in 2007. Add it all up, and the resorts’ total gross revenue of $23.9 billion in 2014 came close to the 2007 figure of $25.3 billion, Nevada Gaming Control Board figures show.
The higher visitor numbers are certainly a positive for an area that reeled from the recession when travelers cut back on leisure trips, but Las Vegas is still in “strategic recovery mode,” and it won’t be able to rely on gambling revenue to get out, said Jonathan Galaviz, a casino industry analyst with Global Market Advisors in Las Vegas.
People still love going to Vegas, but they’re just not spending as much as they used to. And part of the reason, Galaviz said, is there haven’t been any monumentally new attractions the past few years to open tourists’ wallets.
Other recent and future additions to the Strip, Caesars Entertainment’s High Roller observation wheel and MGM Resorts’ future 20,000-seat arena, are interesting but ancillary to what they already offer, he said.
He said the new $4 billion Genting Group project, Resorts World Las Vegas, that’s expected to open in 2018 could be, “something new, something exciting, something interesting” prompting visitors to stay longer and spend more, in the casino or otherwise.
“We spent the better part of a generation building bigger and more hotel rooms,” said Jeremy Aguero, with economic firm Applied Analysis in Las Vegas. The last eight years have been spent, “building reasons to fill those rooms,” including the arena, nightclubs and others, he said.
He said record visitation and signs of improvement would only be better if it came with record room rates and gambling revenue, too, but he’s not complaining.
“There’s no way I’m ever going to look at record visitation and suggest that’s not a good thing,” he said.